Since I just sold my house lately, I just want to share with you some tips for this real property gain tax (i.e. RPGT) that I learned.
First tip is you can apply for waiver for this RPGT once in a life time. This means once you use it, that's it. So think carefully before you apply for this. :D
There are forms (from Income tax office) that you need to fill up for this application. For convenient, you can just ask your lawyer to do that for you. Most lawyers offer this service. You still need to pay for the RGPT and once your application is approved, they will refund your money.
You need to show this document (either one) for this RPGT waiver applications:
- Your electricity or water bill OR
- Occupation Certificate (i.e. OC) of your house
A lot people do not know about this OC thingy, even for my lawyer. I figured that out myself from my income tax office website. This is very useful especially if you have new house and not vacant yet, and you want to sell your house. No electricity or water bill is required.
Second tip is don't put 2 names under this property if you trust the other party. The reason is if this property belongs to 2 of you (e.g. couples), you both need to apply for this RPGT waiver. Once both of you applied, that's it. You both have already used this once in a life time ticket! lol :) If you trust your partner and just use one name, you can save one more time of RPGT waiver in future. :)
Okay, that's all! Hope this helps! :)
21 Comments:
Vincent, for point 2, I don't agree that the criteria of "trust" is good enough to not using join name. This is because apart from tax saving, you have to take estate issues into considerations.
If the join owners are a couple(boy friend and girl friend) or siblings or parent and child, the surviving party may not be the sole beneficiary of the property. They may have absolute trust in each other, but legally the join investment property may end up stuck in the estate of the party that passes away prematurely. If that happens, the Malaysia Distribution Act will be the basis of distribution for non-Muslim without Will. For Muslim, the Faraid law will be the basis of distribution. Under these laws, the surviving party may not be the beneficiary of the property and end up losing his/her investment money to the estate of the passed away party.
We need to be careful in this area or we may end up penny smart, dollar foolish because we could have lost our property ownership due to estate issue, not due to lack of trust.
Thanks for the comment! :)
How about writing a will? I think that should solve the passed away problem?
The only problem is this person may run away with that property. That's where the trust element comes.
Read again your comment(especially on second paragraph), are you saying joint name is okay or not okay?
I'm kind confused with your comment.
You can surely trust me! :) ke ke ke!
Sure, I do. :)
Manage to sell your property or not? If not, will be hard to sell d lor due to the RGPT!!
Sold already, bro! :)
Bro Champdog,
What if i want got 2 house and want to sell the 2nd house but want to keep the 1st house?
can rpgt can be waived in this case?
hehe
Yes, you can, as long as you have never used it. This is exactly my case, I used it for my second house.
So, rich already? :)
If previously i purchased subsale n now i wan to sell, do i hav OC for this case? OC isit only apply for 1st buyer direct purchase from developer?
My take is it should be fine.
I think your statement of "once in a lifetime" waiver is misleading without telling readers on the limitation of the waiver which states :
An individual will be given an exemption equal to RM10,000 or 10% of the chargeable gain, whichever is greater.
Thanks, I don't know such exemption. Will add a note in this article.
But wait, if it is already waived, you don't need to pay anything. That's why you can use this waiver only once in a life time.
Hi ChampDog,
Can you send me the web link where you get the Occupation Certificate??
Thanks
Hi ChampDog,
I'm selling my first house soon. Can you send me the web link where you get the Occupation Certificate from the LHDN official website??
Thanks.
OC is not issued by the LHDN and I think is by the town council. You can just get it from your developer, they should have it. That's for my case. Or if you have lawyer, just ask him/her to do everything for you. Hope that helps & sorry for the late reply. I missed this comment.
Yes, i figure it out yesterday after reading back your blog
Definitely it helps so much, thank you for your information :)
You're welcome! Good luck to you! :)
Hi,
Just a question. If the net gain is 300,000 after the sale & it is a joint name house of husband & wife, what is tax need to pay if both husband wife want to exercise their waiver entitlement , can all tax amount be waived? Note: the sold property is in the 3rd year
Yes, all tax can be waived for husband and wife. This is exactly my case.
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